Brazil fintech Nubank opens Mexico office as it seeks Latam expansion

FILE PHOTO: The logo of Nubank, a Brazilian FinTech startup, is pictured at the bank's headquarters in Sao Paulo, Brazil June 19, 2018. Picture taken June 19, 2018. REUTERS/Paulo Whitaker

SAO PAULO/MEXICO CITY (Reuters) - Brazilian fintech firm Nubank will open an office in Mexico on Tuesday, an initial step in a potential expansion into other Latin American countries, a company executive said.

Nubank, a six-year-old startup that has raised $400 million from investors such as China’s Tencent Holdings Ltd, Sequoia Capital, Tiger Global Management and Kaszek Ventures, will start Mexican operations with 20 employees, Nubank executive and co-founder Cristina Junqueira said in an interview.

Junqueira said the digital bank, which will use the name Nu in Mexico, plans to start issuing credit cards in the second half of the year. Nubank says it has 8.5 million clients in Brazil, mainly credit card holders.

Investors see Mexico as an attractive market for fintech because many people do not have bank accounts but there is good mobile internet coverage. Similar conditions contributed to fintech growth in Brazil in recent years.

Mexico City-based fintech investor Manolo Atala said Mexico would be a good growth opportunity for Nubank, since the country has low credit card penetration and no other fintech offering the same services.

But he warned that interest rates charged by traditional banks to retail customers are not as high in Mexico as they are in Brazil, which would make the competition for new entrants like Nubank tougher.